Ron Paul on FoxBusiness.com Live

Connell McShane: But I will begin by myself now with Congressman Ron Paul out of Texas to join us from Capitol Hill. It’s good to see you, Congressman. Thank you very much for coming on.

Ron Paul: Thank you.

Connell McShane: We appreciate it.

Ron Paul: It’s good to be with you.

Connell McShane: All right. So, by the way, did you catch Senator Bunning with Chairman Bernanke today or you’re not around a television to see that?

Ron Paul: No, we’ve been on the House floor and we just got finished with some votes. I didn’t get to see it.

Connell McShane: It sounded like maybe you sent him an e-mail with the questions.

Ron Paul: Yeah.

Connell McShane: But they had a… maybe the best way of putting this is they had a healthy exchange with the chairman earlier today about the auditing of the Fed and what have you, but obviously, you did the same yesterday and for people who don’t know, Congressman Paul has a bill that is getting a lot of support on Capitol Hill. He wants to audit the Federal Reserve. The Federal Reserve says, “Hey, wait a minute. We’re an independent body. We want to stay independent.” What’s wrong with that?

Ron Paul: Well, because it’s secret and they can spend a lot of money that’s off budget and they don’t have a right to do this, so I would say that we need to know exactly what they’re doing.

Connell McShane: Now, the problem is they don’t want to have you influencing, you being the Congress, generally speaking, influencing their decisions on monetary policies and in fact, Senator Bob Corker today, at that very same hearing, called a potential audit of the Federal Reserve or oversight a catastrophe taking away from their independence. What do you say to that?

Ron Paul: Well, I would say they’re completely wrong. First, we’re not taking over monetary policy. We’re allowed to examine it after they do it and what they did and why they did it. If you give $10 billion to Goldman Sachs through the discount window, don’t we have a right to know that and why they do it and who are the beneficiaries? But we’re not going to look over their shoulder and design a monetary policy. Congress couldn’t be able to do that. They wouldn’t be able to do it. But that’s not the purpose of it.

Connell McShane: Right.

Ron Paul: The purpose is, you know, they claim they’re for transparency, but except for certain things that they don’t want to be transparent. So with some things, they don’t want you to know about, which is just about everything that is important. But we have an obligation. The American people want it and that’s why they’re demanding it through this audit bill.

Connell McShane: Well, yeah, and as you have a lot of support for it. Again, as I said in Capitol Hill, it’s really been building. Since the last time we’ve talked to you and we’ve had some other supporters to the bill on the air and even since then, it’s seems to building a groundswell of enthusiasm for people who may be angry like you are about the decisions that had been made and so and so forth.

But, you know, to your point about they want transparency in some areas and don’t in others. We have somebody on a few minutes ago who used to work at the Federal Reserve, David Jones. He was an economist there and we asked him about it and he was saying, “Yeah, you know what? I don’t like the idea of having a say and certainly in monetary policy, you don’t want politicians have any say on that.” You’ve said that you wouldn’t, but he did give in to the fact that when we were talking to him that he could see some instances where we’d like to see more transparency. You made and gave the Goldman Sachs’ example. I knew you would, so I brought that up to him as well.

Ron Paul: Right.

Connell McShane: And he said, “You know what? I can see that.” So in the bill, it’s a short bill, I think it’s only three pages, could there be something specific to put in that would outline we’ll have oversight of this, but not of this. Is it written specifically enough and do we need to get it a little more detailed?

Ron Paul: Well, no, what we do is we repeal the prohibitions. They say we cannot allow to audit the Fed right now, “except for”, and I repeal all the except fors, but you could add something and say that you wouldn’t need to know the precise details of monetary policy maybe for six months or a year. Bernanke claimed yesterday, he says, “How would it be,” he says, “it would be so politicized if we had a hearing one day and raise interest rates and they send the auditors in the next day.” Well, that’s a gross distortion of what it’s all about. That is not what is intended at all.

Connell McShane: So what would it look like? You’d wait for a while or what would the rule be?

Ron Paul: Well I think you could put a limit on it. I mean, how long would it take to get together an audit, design it and perform it? They’re not going to do it instantaneously on a day-to-day basis, so, yes, the American people are expecting this and I think we’re going to get it, but they’re going to work very hard and you can tell that there are so many articles coming out now that they say that we would be… if we had our way, it would immediately push interest rates up and it would be politicized.

Connell McShane: Right.

Ron Paul: Well, what could be more political than Goldman Sachs getting money under the table, so to speak, or what could be more political than when it’s been notorious and it’s been known for many decades that chairmen of the Federal Reserve Board accommodate presidents when they’re up for re-election, reappointment to the Federal Reserve Board, so it’s already politicized. It’s not like…

Connell McShane: Bernanke would say or he had said, Congressman, Chairman Bernanke said that the influence would be implicit, not explicit, that the meetings would be, you know, that the governors wouldn’t speak openly, for example. They would be afraid that what they’re saying is being looked at too closely and that independence that has been at the center of the Federal Reserve since its creation just wouldn’t be there anymore.

Ron Paul: Well, I mean, that’s their argument, but why should we be denied the truth. That sort of like saying we’re not allowed to know about what the torturers are doing because it would make us look bad.

Connell McShane: Right.

Ron Paul: I mean, if they have good policy and they’re designed right, they’re not cheating anybody and there’s no fraud, no special privileges, what are they afraid of? I mean, they’re getting tenacious now. So the harder they fight us, the more it stirs up the question, “what are they hiding?”

There is no reason for them to be hiding anything. We should know what they’re doing. They can literally create money and appropriate money and spend money. They’re a congress in themselves. They are a self-government. It’s against the law to spend money that is not appropriated, but they create money. They loan to governments. They loan to central banks. They get involved in international banking organizations and that’s just not… and now that we’re in this crisis and now that this will lead to a dollar crisis, people are getting very concerned.

Connell McShane: Right.

Ron Paul: And they know where the mischief had been and once you realize that it’s the Federal Reserve that creates our business cycle, our inflations, our recessions, our depressions, that’s even more reason for us to look at monetary policy.

Connell McShane: And you’ve been one of the people that has pointed a finger directly at the Federal Reserve, whether it’s Bernanke or his predecessor Alan Greenspan for their role in this financial crisis. In fact, I believe and you can correct me if I’m wrong or take it to a different direction, that you… you know, you don’t even see the need for a central banking system at all. I mean, you’d like to see and what makes it interesting is that you like to change the system that as it is. I mean, you don’t want the system to be in place in the first place. You don’t think it works, right?

Ron Paul: No, they’ve asked me whether I think Bernanke should be fired and I think it’s irrelevant. I mean, who are you going to put in place. Do you want another central economic planner? It doesn’t work economically. It’s not authorized in the Constitution.

Connell McShane: Right.

Ron Paul: The founders hated the idea of a central bank and we lived a long time up until 1914 without a central bank, so yes, freedom does work and sound money does work and it removes all the special interests of big government financing wars that we shouldn’t be in, financing the welfare state which we shouldn’t be in, and we wouldn’t be in this financial trouble, believe me, without a Federal Reserve system.

Connell McShane: Well, let me ask you about that because and you’re right, the history is right that every time that the central banking system was brought up before the early 1900s, the plan was defeated for one reason or another. It usually has been brought up though, and even one that was implemented around some sort of a crisis, some sort of a banking crisis where there was the need, the thinking was, for some sort of a central banking system. So then we certainly had a crisis. We all agree that there was a crisis in the economy last fall. What would have happened had there not been a central bank in place last fall? Bernanke, of course, and those… they would have argued that things would have been much worse.

Ron Paul: Yeah, but we wouldn’t have had the crisis.

Connell McShane: You don’t… it wouldn’t have gotten there in the first place, why is that?

Ron Paul: Oh, no. There’s no way, but there’s a good example and you might pursue and say, “Well, since we do have the Fed, we have the crisis, what should we do?” We should look in 1921, they inflated to finance World War I, then we had to have the correction, which is right and proper, we should have a correction and it was done hands off and in one year, it was over with.

But Hoover and Roosevelt felt like they were compelled politically to get involved and now we’re doing that wholesale. We’re doing it worse than ever. We’re doing it even worse than Japan did after 1989, so they’re on and on, to bail out everybody and prop up bad debt instead of liquidating it. You’ve got to get rid of the mistakes. You’ve got to make the corrections. So, yes, they created the problem and they are compounding the problem. But most of the inflationary bubble was not created by Bernanke, it was created by Greenspan.

Connell McShane: So you blame… the finger gets pointed to Greenspan and that’s why now that Bernanke is the chair, what do you think should happen to him? Do you think he’ll be reappointed or should he be reappointed as Fed chairman?

Ron Paul: Probably. It doesn’t matter. I mean, you’re not going to get anybody else that can manage a central economics at all whatsoever, so that’s not going to be of any benefit just to change him now.

Connell McShane: Now, all right. so…

Ron Paul: But I think he’ll probably be reappointed.

Connell McShane: Fair enough. So Bernanke, by the way, speaking now on the Senate side of the Capitol. Congressman Paul of Texas joins us from Capitol Hill today and he was part of the testimony and the questioning and answer session yesterday. You know, Congressman, before we let you go, there are a couple of… I mean, why don’t you weigh it on healthcare? We had a big debate about it earlier on this show. How is your vote going to go down in this healthcare bill?

Ron Paul: Well, I’m not going to vote to expand the role of government in healthcare. They’ve ruined it, just like the Federal Reserve ruined our financial system, so we’ve had government involved in education, in medicine, you know, in major ways since the early 1970s. We have Medicare. We have Medicaid. We have veteran’s benefits. We have organized and these planned medical care, managed care since the 1970s and it’s a disaster. Costs have gone up. Quality has gone down and now, what we want to do is give us more government and that’s not the solution at all. We need to believe once again that free markets can work. Free people can solve problems that governments cause mischief.

Governments have caused all the bureaucracy. They have caused the high cost of medical care and so why resort to the part of medical care that we detest? I mean, you can find all kinds of complaints from Medicare patients, Medicaid patients, and at Veterans Hospitals and yet we want to universalize that system and punish the people who are quite happy.

Connell McShane: Right.

Ron Paul: It’s sort of like it’s TARP funds. Punish the people who were prudent and reward the people who were making boondoggles out of their speculations. So I would say with medicine, it looks like we’re doing the same thing.

Connell McShane: You know, I think it’s interesting that… I always think it’s very interesting that two people, or more than two people, but that people that are so well thought out on certain issues as you clearly are on many of these issues, particularly monetary policy, which you’ve spoken over the years can disagree so much. In another words that we can have somebody on yesterday that could see it completely from the other side whereas you see it this way and this whole idea of less government involvement, which is obviously getting a lot of traction of late, you know, some people have championed it for years. Alan Greenspan who you criticized, you know, had for many years, been known as a free market economist, someone who championed deregulation, hands off. He has come out in recent years and said, “You know what? That wasn’t totally right. You know, my thinking wasn’t right on that.” What would you think with someone like Greenspan who had been on your side, I would think, on a lot of these issues who had said, “You know what? I was wrong. These free markets don’t always work the right way.”

Ron Paul: Well, I think he got infected with some bug, by him being inside the beltway too long or being driven by the establishment because I’ve told him this personally. The things that he wrote in the 1960s about the gold and his major criticisms of the Fed and how inflation liquidates wealth from the innocent middle class… I mean, he was great. He was absolutely right. He talked a lot like an Austrian economist, but he rejected that. He became a Keynesian and it isn’t Greenspan alone that caused the problems. It’s the fact that the world basically has followed Keynes rather than Mises over these many years and we’ve gotten ourselves in this trouble. But right now, the undercurrent is that free market economics is alive and well. The numbers are growing. Keynesianism is dead, just as communism and socialism died in the last century and right now, we’re in the midst of things, but it will be proven that economic planning and inflationism and central banking, it’s a failure and we’re paying the price.

Connell McShane: Right.

Ron Paul: And this is going to go on for a while because we’re only in the early stages of the correction that has to happen.

Connell McShane: All right. We have to run, Congressman, but we always appreciate the back and forth. Congressman Ron Paul, thank you very much.

Ron Paul: Thank you.

(If you’ve found a spelling or transcription error, please notify us anonymously by selecting the misspelled text and then pressing Ctrl+Enter. Thank you!)

9:14 am: "ooo wow nice attempt at a ad hom! Did the reds steal the election from you? Where is McCarthy when you need him? Am I right?" - JBrown

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